Police have arrested a man following a five-hour siege in Wollongong.
The 25-year-old man barricaded himself inside a unit complex on Bourke Street in North Wollongong at about 10:30am.
Heavily armed officers, an armoured police rescue vehicle, ambulances and the dog squad surrounded the property while neighbouring residents were told to leave their homes.
Superintendent Jason Box said the man retreated into the building after he mounted a footpath in his car following a police chase between Berkeley and the Wollongong CBD.
"Police observed the vehicle driving in an erratic manner," he said.
"When attempting to pull that vehicle over they were rammed … it was pursued for short distance before it was terminated.
"It was believed this male was in possession of a shortened firearm, therefore the technical operations unit and police did surround and contain that block of units."
Residents taken hostage
Superintendent Box said there were people inside the unit who were taken hostage.
"There were negotiations held with this person and he was apprehended peacefully and taken back to Wollongong Police Station for interviewing," he said.
"We believe there were other occupants inside the building detained against their will, but they've also been spoken to by police and aren't injured."
Superintendent Box said the unit would be searched to determine whether any firearms were present.
The operation was witnessed by several residents of the complex, who were forced onto the street.
John, a resident who did not want to use his surname, said he had lived in the unit block for 37 years and felt stressed by the incident.
"We haven't felt safe in here for more than five years," he said.
"There's people sleeping under the building, in the laundry, cars get vandalised.
"It's very stressful."
Amelia observed the incident from her third-storey apartment, which overlooks the unit block.
"There was a car speeding down the road then it mounted the kerb and a man ran out and fled into the building," she said.
"Police cars were chasing [him].
"There was a loud bang, and the car was driving very fast."
Police are continuing their investigations into the circumstances surrounding the incident and expect to lay charges later today.